Chapter 4 T/F Flashcards
A deductible contribution to an IRA is an above-the-line deduction
True
The standard deduction for all individual taxpayers is $3,000.
False. The standard deduction amount varies according to the taxpayer’s filing status. These amounts are indexed annually for inflation.
For the 2011 tax year, taxpayers with adjusted gross income over $150,000 are subject to an overall limitation on their itemized deductions
False. For 2011 there is not a limitation on itemized deductions as had been in prior tax years.
A taxpayer who may be claimed as a dependent of another taxpayer will also be entitled to a personal exemption for himself or herself.
False. If a taxpayer can be claimed as a dependent of another taxpayer, that person is not entitled to a personal exemption for himself or herself.
In order for an individual to be treated as a qualifying child of the taxpayer under the dependency exemption rules, the individual must not have provided more than half of his or her own support during the year.
True
A father can claim a dependency exemption for his 18-year-old married daughter who files a joint return with her spouse who has substantial income.
False. A taxpayer may generally not claim a personal exemption for a child who is married and files a joint return with his or her spouse.
The phaseout of a deduction or a tax credit can increase the effective rate of tax that taxpayers actually pay.
True
A noncustodial parent may claim the child as a dependent if the custodial parent signs a written declaration agreeing not to claim the exemption for that year.
True
The lowest marginal rate of tax on ordinary income is currently 25 percent.
False. The lowest marginal rate is currently 10 percent.
To file as a surviving spouse, a taxpayer must maintain a residence for a child of the taxpayer for whom he or she is entitled to a dependency exemption.
True
A taxpayer can qualify as a head of household by maintaining a parent in a nursing home.
True
Under the kiddie tax rules, net unearned income of a child under a specified age is taxed at the marginal rate of the child’s parents.
True
The kiddie tax applies only to income from assets received from a child’s parents.
False. The kiddie tax rules generally apply to unearned income of a child, regardless of whether the income-producing assets were received from the child’s parents.
Corporations are generally required to file tax returns by April 15.
False. Corporations are required to file returns by the 15th day of the third month following the close of the taxable year.
